Wednesday, November 26, 2008

Stantec keeps on wheelin' and dealin'

Anyone who wondered if Canada's economy would keep Stantec from continuing its ongoing acquisition spree can rest easy: The answer is no.

Stantec made headlines both in the United States (articles on CNNMoney.com) and in its native Canada (articles on CBC News' web site and the Toronto Star, among other Canadian news outlets) for its impending purchase of Jacques Whitford, a Halifax, Nova Scotia-based environmental consulting firm.

According to various news reports, the Edmonton, Alberta-based engineering firm Stantec is offering $143 million to buy Jacques Whitford to strengthen its presence on Canada's Eastern seaboard.

The deal would double Stantec's presence in the Atlantic region and help expand the range of its services as Jacques Whitford has 1,700 employees across Canada and about 500 of them work in the Maritimes, according to CBC News.

Stantec will be meeting with employees and shareholders this week to provide them with the deal's details.

Tony Franceschini, the president and chief executive officer of Stantec, said he will be meeting with the employees and shareholders this week to provide them details of the deal. Further, Franceschini said the board of directors and the senior leadership of Jacques Whitford have already agreed to vote their shares in support of the deal. He said he expects Stantec shareholders will also support the transaction. Both he and his counterpart at Jacques Whitford believe most employees will keep their jobs if the merger happens.

Franceschini said in an article on Canada's Financial Post web site that he's going ahead with the deal because it's available now, it fits with Stantec's strategy of becoming a global design leader, and it doesn't require new credit.

"It's a bit like dating and getting married. You don't always pick the time," Franceschini said in an interview. "Whenever you buy a good firm, you are going to have to pay a fair price for it. We have the financial ability to do it, it's not going to stress our credit facilities, so why not now?"

The acquisition boosts Stantec's annual revenues to $1.5-billion from $1.2-billion, and its staff to 10,700, from 9,000. It will be funded from Stantec's existing credit facilities and paid for over three years.

The vote is set to take place in December and if approved, Stantec will close the transaction in early January. Stantec has 9,000 employees in 150 locations throughout North America.